GBP and CAD Remain Negative and Vulnerable Versus the USD

Technical Analysis

The GB Pound and Canadian Dollar both moved to new long-term secular lows versus the US currency to start 2016.

The GBPUSD break below the 2015 low at 1.4566 placed the spot rate at its lowest level since 2010. Moreover, the USCAD break higher close to a long-term level from 2003 sees the market at its highest level for over 12 years.

We see further GBPUSD losses and USDCAD gains into January.

Technical analysis of more currency pairs


Another new cycle and secular low to end the first week of 2016, having broken below the 2015 low at 1.4566 (to place GBPUSD at its lowest level since 2009) and with the rebound capped ahead of 1.4682, we see a still bear bias for Monday.

Moreover, bigger picture, the push through the 2015 low at 1.4566 reinforces previous bear signals from Q4 through 1.5024, 1.4894 and 1.4856, tp leave a negative theme for January.

For Monday:

  • We see a downside bias for 1.4500; break here aims for 1.4465 and 1.4405.
  • But above 1.4600 opens risk up to 1.4682, which we would look to try to cap.

Short/ Intermediate-term Outlook – Downside Risks:

  • We see a negative tone with the bearish threat to 1.4346.
  • Break aims for 1.4229 and 1.4000.

What Changes This? Above 1.5336 signals a neutral tone, only shifting positive above 1.5509.

Weekly GBPUSD Chart



Despite a stall at a key target at 1.4190 late last week, the setback and rebound from above modest support at 1.4046, leaves an upside bias for Monday.

Furthermore, the December surge through the key 1.3457/62 resistance area and early 2016 push above 1.4000/30 sets a still bullish tone for January (and beyond).

For Monday:

  • We see an upside bias for  key 1.4190; break here aims for 1.4245.
  • But below 1.4105 opens risk down to 1.4046, which we would look to try to hold.

Short/ Intermediate-term Outlook – Upside Risks:

  • We see a positive tone with the bullish threat to 1.4030.
  • Break targets 1.4190, 1.4500 and 1.4660.

What Changes This? Below 1.3221 signals a neutral tone, only shifting negative below 1.3036.

Monthly USDCAD Chart


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